GS: Last year, the market bottomed ahead of most of the actual increase in effective tariff rates

🇺🇸 Construction spending on data centers is going parabolic.

Potential credit issues stemming from the Fed's hawkish pivot are now becoming apparent. 5-year CDS spreads have meaningfully widened for both IG & HY credit over the last two weeks. Monitoring this situation.

A structural shift is taking place underneath the surface of the U.S. Housing Market. And it could unleash a lot of pent-up housing supply. Over the last 12 years, the number of 75+ Homeowners has grown significantly gaster than 25-44 year old renters. As a result, the ratio of 25-44 renters to 75+ homeowners has dropped from 2.16x in 2012 to just 1.70x in 2024. And some states are already below 1.00x. Meaning there aren't enough future first-time buyers to absorb the future supply from senior homeowners aging out. Check the 75+ Owner to 25-44 Renter metric for your ZIP: reventure.app/map?geo=county…

Entering the final quarter of the year, investors in US markets face two important questions: • Equities: How far can dispersion go within the S&P, and if there's a limit, how does the eventual convergence play out? • Fixed Income: How high is the bar for yields and spreads to entice buyers in size? #economy #markets #investors #investing #stocks #bonds

From the Wall Street Journal: US stocks versus bonds, year-to-date. #economy #markets #stocks #bonds @WSJ

3.35% on the 30yr TIPS

MIDDLE EAST CRUDE EXPORTS RECOVER TO PREWAR LEVELS, ANALYSTS SAY GOLDMAN ESTIMATES CRUDE EXPORTS FROM PERSIAN GULF PRODUCERS AT 19 MILLION B/D INCREASED HORMUZ EXPORTS DROVE RECOVERY, GOLDMAN SAYS JPM ESTIMATES CRUDE EXPORTS HIT 98% OF PREWAR LEVELS

September and October have been the toughest months for U.S. Treasuries over the past decade. Median monthly returns: • September: −0.86% • October: −0.71% • November: +0.69%

Market veteran Jim Bianco joins BofA's Hartnett in saying it might be time to start scaling into bonds with an increasingly favorable risk/reward profile. Investors who buy 10-year Treasuries at current levels would need to see yields rise to around 6% over the next year before price losses wipe out the bond’s income, according to data compiled by Bloomberg. The return profile is also asymmetric: A percentage-point increase in yields would produce a loss of less than 2%, while a decline of the same magnitude would generate a return of about 13%. “This is a value play,” said Bianco, president and founder of Chicago-based Bianco Research. “If we start to see yields going higher, I’m going to continue to get in.” “I’m dipping my toe,” said Bianco, whose firm provides macroeconomic and financial-market research. “Everybody’s ridiculously bearish on the bond market right now,” Bianco said. “I’m getting a big fat cushion for buying bonds at 5.2%. Now’s not the time to be losing your mind over it.” “We are returning to normal,” said Bianco, whose firm provides macroeconomic and financial-market research. “The zero rates from 2010-2020 were the ridiculous outlier.”

🦔A data center developer offered $10,000 to every household in Hazle Township, Pennsylvania if they'd approve a 1,300-acre, 15-building campus in the Pocono foothills. 4,500 households eligible, $45 million total. The township voted 3-0 to reject the project, enacted a moratorium on data center construction, and NorthPoint is now suing to overturn the decision. The WSJ couldn't find many residents who wanted the money. My Take $10,000 per household and the check doesn't even come until the first building gets an occupancy certificate, which could be late 2027 or never. Meanwhile your home is worth less the day the project gets approved. A house near a data center is harder to sell than a house near a highway. Buyers see the facility, see the cooling units, hear the noise, and drive away. You're not losing $10,000 in value. You're losing $50,000 to $100,000 or more, and in some cases you can't sell at all. And the $10,000 almost certainly comes with strings. I'd bet anything there's a waiver in there that limits your ability to sue over noise, pollution, or property damage. So you take the money, sign away your legal rights, and your house still lost more value than the check was worth. NorthPoint got rejected 3-0 and sued the township. If these AI companies want communities to say yes, they need to start with full property value guarantees and ongoing compensation. A one-time check for less than a used car doesn't cut it. Hedgie🤗

High yield's finally over 300bps. Nature is healing.

The risk free rate is the base layer everything in our economy is priced off. When yields rise this quickly they tighten financial conditions all at once: mortgage rates, corporate borrowing costs, discount rates on equities, and the mark to market value of existing bonds and leveraged positions. There have been 16 episodes since 1970 (22V Research) in which the 10 year rose at a similar speed; each was followed by some type of market or banking stress, ranging from the 1987 crash and the 1994 bond massacre to LTCM, the 2007–08 crisis, and the 2023 regional bank failures.

U.S. TWO-YEAR TREASURY YIELD REACHES 4.952%, HIGHEST SINCE MAY 2024

Whoops, this is a little scary. The S&P 500 is near all-time highs, yet 100+ NYSE common stocks made new 52 week lows than highs. This is the weakest reading since almost bear market in 2025. 7 of these 8 cases occurred before a major top in $SPX.

Concerning

SCOOP: OpenAI, Anthropic and security researchers are investigating tens of thousands of incidents - not dozens - in which their frontier models took steps that outside evaluators would consider problematic, sources told Axios. The sheer volume of incidents found in our reporting indicate that the problem is orders of magnitude more complex than what is currently publicly known and disclosed. The findings also raise questions about what level of control anyone working on AI development can expect to have over their own technology, and whether these kinds of incidents are becoming synonymous with frontier deployment. Read my latest for Axios here: axios.com/2026/09/26/openai-…

Midterm years can be scary, for sure, but their Q4s are intensely bullish JPMAM

The S&P 500 has been positive every time in the 12 months after the midterm elections (Capital Group) 2022-23 was +16.4% btw

GS: Over the last 90 years, the S&P 500 has produced an average return of 17% in the 12 months following midterm elections.

Will the bond market end humanity before AI?